BoE Governor Sees State-Issued Crypto as Possible

Mark Carney said he could embrace the CBDC idea, but maybe later.

by Nina Dimitrova
29 May • 2 mins
In Regulation

Mark Carney, the governor of the Bank of England (BoE), has expressed yet another opinion on cryptocurrencies, saying he entertains the idea of state-issued cryptocurrencies.

Speaking at a conference in Stockholm, Carney said he was open-minded about the prospect of a central-bank-issued digital currency, according to a Bloomberg report. He added, however, that such a thing was not imminent, and that cryptocurrencies currently don’t perform the role of money.

Carney also noted that the main role of the central bank is to maintain the trust in money.

Earlier this month, the BoE published two working papers analyzing the risks and applications of a Central Bank Digital Currency (CBDC), underlining that the reports do not indicate a possible introduction of a CBDC.

This is the latest development in the BoE governor stance on cryptocurrencies. Earlier this year, Carney slammed Bitcoin, saying that it has failed as a currency and shows signs of an economic bubble. He, however, endorsed the blockchain technology, saying it could improve the existing financial system.

In March, Carney called for tighter regulation on cryptocurrencies, in order to crack down on illicit activities and the general “mania” surrounding them. He also expressed his concern that their inherent risks meant investments in digital currencies could lead to the loss of money.

In April, at another event Carney repeated his stance, noting that even though cryptocurrencies do not pose imminent threat to the financial system, because they are not connected to it, they should be regulated. He also said that cryptocurrencies pose a challenge for market integrity because “a huge amount” of illicit activity is run through them.

Despite the lingering skepticism for cryptocurrencies and blockchain among the majority of the “old-school” financiers and c-bank governors, an increasing number of national banks are looking into the issuing of a national fiat-backed cryptocurrency. The most recent examples are Norway, Switzerland, and South Korea, whose central banks are reviewing this option, and Venezuela, which issued its own petrol-backed cryptocurrency, dubbed Petro.